Mar 2010 Financial News

Prepare for loss, investors told

Mar 22, 2010

PEOPLE WHO HAVE invested millions of dollars in CLICO International Life's investment instruments should prepare themselves to take a hit.

Ronald Harford, chairman of Republic Bank Limited, the parent company of Barbados National Bank, cautioned that he was not fully aware of all the details of CLICO Barbados' operations but suggested that getting back their initial investments should be more important to CLICO clients at this stage than insisting on interest payments due.

"A return of capital is better than a return on capital. In the end one may have to come to terms with the possibility that they may have to lose interest," Harford told BARBADOS BUSINESS AUTHORITY last week.

His comments came just hours after Prime Minister David Thompson announced that CLICO International Life and British American Insurance Company had been barred from writing new business by the Supervisor of Insurance.


Pay cost now

Harford said if CLICO investors were over the years enjoying interest rates that were way above market value, then they should be prepared to pay the cost now that the company was illiquid.

"You may have to suffer some discount until such time as liquidity is restored. You can't go and sell sugar-cane lands now," he said.

"Whereas we all sympathise with anybody who loses money, I think in the final analysis, particularly in Trinidad, people
are very lucky that the government stepped up to the plate because in some respects it had no legal obligation to.

"There was no legal responsibility to do it and it is a situation like the United States where you have companies that are too big to be allowed to fail . . . the government is protecting the country from peril by supporting [CLICO] and every country will have to make the assessment," he pointed out.


Source:
GERALYN EDWARD
Nation News
Monday March 22, 2010

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